Senator Grassley comments on support for the Physician Payments Sunshine Act
M E M O R A N D U M
Senator Chuck Grassley, Ranking Member of the Committee on Finance, todaycommented on statements made yesterday by Medtronic, Inc. and AdvaMed in support ofdisclosing payments made by pharmaceutical drug, medical device and biotechnology companiesto physicians.
In addition, in a hearing of the Senate Special Committee on Aging to be held thismorning, Zimmer Holdings Inc. will voice its “strong support” for the Physician PaymentsSunshine Act (S.2029). The legislation would require pharmaceutical drug, medical device andbiotechnology companies to disclose payments to physicians.
In recent years, the Department of Justice has settled several lawsuits with companies forimproperly compensating medical doctors. Last September, Senator Grassley and Senator HerbKohl, Chairman of the Special Committee on Aging, introduced S.2029 to throw a spotlight onthe ways companies compensate doctors. These payments have been found in some cases toalter medical judgment in ways that benefit companies at the expense of patient care.Here is Senator Grassley’s comment:
“These device makers deserve a lot of credit for getting ahead on this important issue andendorsing the objectives of our legislation. It’s good to see corporate support for bringingtransparency to practices in the pharmaceutical drug, device and biotechnology industry.”The text of the statements from Medtronic, Inc and AdvaMed is below, along with asummary of S.2029.
Tuesday, Feb. 26, 2008
Medtronic Statement Regarding Senate Hearings on Industry and Physician RelationshipsMINNEAPOLIS - In advance of hearings on Wednesday, February 27, in the SenateSpecial Committee on Aging, Medtronic, Inc. (NYSE:MDT), today issued the followingstatement:
On Wednesday, February 27, the Senate Special Committee on Aging will explorerelationships between industry and physicians and consider the proposed "Sunshine Act"(S.2029) introduced earlier this year by Senators Chuck Grassley (R-IA) and Herb Kohl (D-WI).The Sunshine Act would require industry to publicly disclose via the Internet certainpayments made to physicians in return for their time and expertise with product development,research and training. For decades, the innovative power and clinical expertise of physicianshave produced technologies that industry has brought to patients around the world, andMedtronic believes these vital collaborations must be protected.
The Sunshine Act is aimed at curbing inappropriate relationships or conflicts of interestsbetween industry and physicians, an effort that Medtronic - one of the world's leading medicaltechnology companies - supports.
Medtronic believes, however, the bill can and should go even further by requiring thesame level of disclosure by all companies in the industry, regardless of and including thosecompanies owned in whole or in part by physicians. Companies with yearly revenues less than$100 million and physician-owned companies are currently excluded from the bill, and theyaccount for more than 75 percent of the companies in the industry.
Medtronic believes a level playing field for all companies is appropriate and that theseentities should operate under the same disclosure requirements, recognizing that transparencycan help alleviate any real or perceived conflicts of interest with these types of companies aswell.
"We have been pleased to work with the members of the Senate Special Committee onAging, the Senate Finance Committee, and members of the House of Representatives and Senateon this legislation," said Bill Hawkins, president and CEO of Medtronic. "We will continue towork with the sponsors of this legislation to incorporate all companies in the industry into thebill and bring greater transparency to these important relationships."
Medtronic, Inc. (www.medtronic.com), headquartered in Minneapolis, is the globalleader in medical technology - alleviating pain, restoring health and extending life for millions ofpeople around the world.
Any forward-looking statements are subject to risks and uncertainties such as thosedescribed in Medtronic's Annual Report on Form 10-K for the year ended April 27, 2007. Actualresults may differ materially from anticipated results.
Medtronic, Inc. Rob Clark, 763-505-2635 Government Affairs or Martha GoldbergAronson, 763-505-2694 Investor Relations
AdvaMed Suggests Changing Disclosure Bill
Saying it supports appropriate disclosure of medical device industry financialrelationships with doctors, AdvaMed released recommendations for seven changes to thePhysician Payment Sunshine Act (S. 2029). The release came the day before the association wasto testify at a Senate Special Committee on Aging 2/27 hearing on the issue.
“Continued innovation in medical technology relies on direct interaction with physicianswho have first-hand clinical experience with advanced medical treatments in their practice ofpatient care,” said AdvaMed CEO Stephen Ubl. “Our industry works closely with physicians toinvent new medical devices, improve existing technologies, and provide training to physicians toensure they can use devices safely and effectively. The importance of the relationship betweenphysicians and medical technology innovators cannot be understated. It is a critical componentof the engine that drives the next wave of medical advancements. In an effort to underscore theimportance of physician/medical innovator collaboration, and to ensure openness with theserelationships, AdvaMed would support S. 2029 provided that key changes are made to the bill.”Ubl said the bill could be significantly improved by: expressly preempting statedisclosure laws to ensure consistency in application and patient understanding; applying therequirements to all companies that make a significant amount of aggregate payments tophysicians, while excluding those that do not; requiring compliance by physician-ownedmanufacturers, distributors, and group purchasing organizations; displaying disclosureinformation in a meaningful and easily-understood format that provides the appropriate contextfor patient education; protecting manufacturers’ proprietary information for technologies underdevelopment by ensuring that disclosure of consulting arrangements for clinical trials andproduct development agreements are required only after a product is cleared or approved byFDA; exempting reporting of medical textbooks, anatomical models, or items having a fairmarket value of less than $100 that benefit patients, relate to physicians’ work, or serve aneducational function; and exempting certain items, such as demonstration units and models forphysician and patient evaluation.
Meanwhile, Medtronic, which also is to testify at the hearing, said the legislation shouldgo further by requiring the same level of disclosure by all companies in the industry, regardlessof and including those companies owned in whole or in part by physicians. Medtronic saidthe bill as drafted exempts companies with yearly revenues less than $100 million andphysician-owned companies, but they account for more than 75% of the industry’s companies.“Medtronic believes a level playing field for all companies is appropriate and that these entitiesshould operate under the same disclosure requirements, recognizing that transparency can helpalleviate any real or perceived conflicts of interest with these types of companies as well,” theMedtronic statement said.
Summary of S. 2029, as introduced.
Physician Payments Sunshine Act of 2007
(a) REPORTING: requires drug and device companies to report, on a fiscal-year quarterlybasis, any payment or transfer of value to any physician.
a. Each electronic disclosure must include:i. Name of physician or entity;ii. Physical address;iii. The facility with which the physician is affiliated, if any;iv. The value of the payment or other transfer of value;v. The date on which the payment or transfer was made;vi. description of the nature of the payment, including compensation, food,entertainment, or gifts, trips or travel, a product or other item at less thanmarket value, educational programs, product rebates, consulting fees orhonoraria, or any other benefit as defined by the secretary; andvii. The medical issue or condition addressed, if any.
(b) SUMMARY: each manufacturer must submit an annual summary report.(c) PENALTIES: $10,000 to $100,000 for failure to report.(d) WEBSITE: the Secretary shall establish procedures to ensure that theinformation is made accessible to the public through a website thatis searchable, downloadable, and understandable.(e) REPORT TO CONGRESS: no later than April 1 of each year beginning in 2009, theSecretary shall report to congress a summary of the datareported and enforcement actions taken.
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